3rd Sep 2018 08:34
LONDON (Alliance News) - Dechra Pharmaceuticals PLC on Monday reported a rise in profit in its financial 2018, but warned on challenging market conditions due to growing competition from European veterinary products suppliers.
The stock was trading 9.6% lower on Monday morning at 2,822.00 pence each.
The veterinary products manufacturer said revenue in the year to the end of June grew 13% to GBP407.1 million from GBP359.3 million reported for the same period a year earlier, pushing pretax profit up to GBP28.9 million from GBP28.6 million.
Dechra proposed a final dividend of 18.17 pence per share, up from 15.33p paid the prior year. The full-year payout totalled at 25.5p per share, up 19% year-on-year.
At the end of December, the company bought New Zealand-based companion animal products firm RxVet Ltd, while in February Dechra acquired animal pharmaceutical companies AST Farma BV and Le Vet Beheer BV.
Excluding contribution from acquisitions, revenue rose 9% during the year to GBP389.0 million.
On a divisional basis, European Pharmaceuticals revenue improved by 14% to GBP258.7 million, while revenue in North American Pharmaceuticals segment grew by 12% to GBP148.4 million.
This growth was driven by the strong contribution from market penetration and new product launches, Dechra said.
As a result, research & development expenses increased by 22% to GBP18.3 million from GBP15.0 million the year before, in line with the company's strategic intent to expand its product pipeline to drive enhanced future growth.
Dechra noted that the veterinary market is seeing faster change than at any time in its history. The company said veterinary distributors, who operate in the majority of countries in Western Europe and North America, are changing and are beginning to increase focus on the sales and marketing of their own products.
Dechra also highlighted that European practice corporate consolidation is increasing, especially in the UK and Northern European countries, while the US companies are taking a small presence in the UK and a significant presence in mainland Europe.
"Following a strong set of results in 2018, the new financial year has started well and in line with management expectations," said Chief Executive Ian Page.
"Whilst there are many challenges in the market, which is developing faster than at any time in its history, we believe that our strategy and flexibility to adapt to change positions us well to continue to outperform," added Page.
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